What Should Private Funds Expect After JOBS Act Is Signed?
April 4, 2012 § 1 Comment
Much of the press coverage of the JOBS Act, justifiably, has addressed the Act’s crowdfunding provisions. For private fund managers, however, the most important development is removal of Regulation D’s prohibition on general solicitation and advertising when privately offering securities to accredited investors. The prohibition greatly limits fund managers’ ability to seek out prospective investors, respond to press inquiries and engage in other marketing activities.
In addition to simply lifting the ban on general solicitation and advertising, however, the JOBS Act instructs the SEC to determine methods that issuers must use to verify that investors are, in fact, accredited. Given the SEC’s earlier public criticism of the Act, we may see the agency adopt rules or interpretations that greatly limit how certain issuers (e.g., hedge funds and other private funds) ultimately are able to market their offerings.
California Extends Emergency Private Adviser Exemption
March 28, 2012 § 2 Comments
The California Department of Corporations this week renewed its emergency rules to extend the period in which certain fund managers can rely on the existing pre-Dodd-Frank “private adviser” exemption from California investment adviser registration.
Senate Lifts Ban on Private Fund General Solicitation and Advertising
March 22, 2012 § 2 Comments
As expected, the Senate passed its version of the Jumpstart Our Business Startups (JOBS) Act today with bipartisan support. The Senate bill adopted amendments to the crowdfunding provisions that differ from the version passed in the House. The chambers will need to reach a compromise on that portion of the legislation.
Will JOBS Act Repeal Ban on General Solicitation?
March 20, 2012 § 2 Comments
On March 8, the House overwhelmingly passed the Jumpstart Our Business Startups (JOBS) Act. The Act would allow crowdfunded equity offerings and, more importantly for private fund managers, would remove the ban on general solicitation and advertising from Regulation D.
Repealing the prohibition would vastly increase the ways in which private funds could reach out to prospective investors. The SEC and state regulators meanwhile are concerned that a repeal would open the doors to widespread abuse and investor fraud.
After Dodd-Frank, the Deluge
March 13, 2012 Comments Off on After Dodd-Frank, the Deluge
The Dodd-Frank Act created a wave of new registration, reporting and other regulatory burdens on investment advisers and managers of private funds. The Act has also had far-reaching effects on the SEC and state regulators as they create new registration and reporting systems and deal with shifting and growing groups of regulated entities. What might it mean for advisers and private fund managers as regulators struggle to deal with their own increased burdens?
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